Leverage - An Army Of Robots to Do Your Bidding

[roguehillbilly]

Hopefully this is okay to repost here -- it's a blog post I wrote but I won't be linking back. I think a lot of the ideas are parallel to the Millionaire Fastlane ideas.

A few years back, I heard about this Naval Ravikant guy who had just published a "tweetstorm" on twitter about all of these crazy ideas on wealth, happiness, finding passion and a bunch of other things.
Who? Naval? Like the orange? Why should I listen to Naval?
Naval is an angel investor and founder of a few successful companies. He was born poor in India, moved to Queens when he was 9 and hung out mostly in libraries as his baby sitter since his mom worked. He got into good schools and went on to found startups and now he invests in new startups and tweets a bunch.
Twitter is a weird place. There are many sub-communities of Twitter, usually characterized by their members as "x-twitter", eg. startup-twitter, venture-capital twitter, knitting-twitter or whatever else. Despite the downsides of Twitter, it really is a good platform. What other place in the world can you ask CEOs of Rocket companies about exhaust flow of their engines and get a reply?

So once you get influential, knowledgeable people on this platform, interesting things happen.
And thus, the Naval tweetstorm was born. The knowledge was almost prophetic and "startup-twitter" blew up, re-tweeting, sharing etc. Did Naval write this beforehand? Had he planned it in advance and scheduled it in his favorite tweet scheduling app? I have no idea, but it seems like good advice.
Naval blew through 40 tweets on "How to Get rich without Getting Lucky". His advice covered productivity, "business" skills (even though business isn't a skill), wealth, capital, accountability, finding your passion and my favorite, leverage.

Leverage​

Leverage is more with less. Its efficiency in what you do. It's tooling that allows you to get more output with the same amount of input.
It's that lever that Archimedes talked about.

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. - Archimedes

In finance and stocks, it's trading assets with more money than you have. It's the code running your entire company.
Naval defines 3 types of leverage:

Labor / People​

People working for other people is the oldest form of leverage and what most of us spend our careers doing. An early-stage company bringing on employees finds leverage in hiring people specialized to do things they aren't skilled in doing, don't have time to do, or just don't want to do. Human leverage can be messy because managing people and leading teams is a difficult thing.

"You're one short hop from a mutiny or getting eaten or torn apart by the mob".

Money​

Money leverage is all about multiplying decisions with cash. Capital is more modern than labor and has made people extremely wealthy. Think of bankers, CEOs and fund managers. People who move large amounts of money around strategically. Money is more scalable than people leverage.

Products with no marginal cost of replication​

Labor is nice, money is cooler, but products (with no cost of replication) are the best. It's the type of leverage most of us who are not privileged with banker credentials and Ivy-league networks can probably attain.
This refers to books, media, movies and code. This blog post is a product that after I hit publish, will cost me nearly nothing to reach nearly anyone in the world. And I don't need permission to do so. Some years ago, you had to submit your idea or content to someone with authority who made a decision on if it should be distributed. Not today. F*ck you. I don't need your permission. It feels very hacker-ey.
Labor leverage requires someone to follow you. Capital leverage needs someone to give you money to invest. Products need no such thing.

The Old Way - Permission​

Approach program directors at the local radio station. Pitch them on your song and hope they like it enough to give you a chance and play your creation.

The New Way - Permission-less​

Grow up in the projects of Atlanta, learn to produce music, buy a beat for your next song for $30. Record at home or a cheap studio for $20/hr. Promote it with memes, go viral, blow the F*ck up and hit #83 on the billboard chart. Lil Nas X did this when he generated over $1 Billion in revenue with Old Town Road.
The examples go on and on, PewDiePie is worth $30-50 million because he streamed himself playing games on the internet. Joe Rogan struck a 100 million dollar deal with Spotify to exclusively distribute his podcast.
Coding, writing blogs or books, YouTubing, tweeting, TikTok-ing and whatever-the-latest-social-network-is-ing all give creators a way to distribute their work without permission.

No cost of marginal replication​

Leverage started with the printing press, gained acceleration with broadcasted media and hit compound-levels with the internet and code. Your efforts are multiplied 10x, 100x or 1,000,000x without hiring people or having access to large amounts of capital.

An Army of Robots To Do Your Bidding​

"Every great software developer, for example, now has an army of robots working for him at nighttime, while he or she sleeps, after they’ve written the code and it’s just cranking away."

"An army of robots is freely available - it's just packed in data centers for heat and space efficiency. Use it." - Naval Ravikant

Developing software is more accessible than ever. Compute resources are more accessible. Digital Ocean, Linode, Ramnode, AWS, GCP and many more all provide cheap servers to host your software on. This blog runs on a $5/mo VPS.
Udemy courses for 15 bucks allow you to learn python, html, javascript, AWS, and server administration. Cheaper than MIT.
Don't want to learn to write code? Great. Use no-code tools, gain leverage, bring in that MRR and hire a developer once you've made enough revenue to do so.
Pieter Levels built Nomadlist with a single PHP script humming away on a cheap VPS while it generates ~$300k in annual revenue. Not terrible.
What value could you create for the world with a terminator-like fleet of machines?

Input Doesn't Equal Output​

Traditional, "real" work like chopping wood or carrying water are tasks where the input and output match. 8 hours put in equals 8 hours of output. Leverage allows a large impact without the same amount of time or physical labor.

You're never going to get rich renting out your time.

You have to use leverage.

 

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[Andreas Thiel]

Meh.

It sounds so awesome. The gatekeepers disappear. Anybody can do anything. Computing is more accessible than ever.

As I see it ... a typical goldrush with very little gold that is easily accessible and big companies already making sure they are on track to capture the motherlode.

With software development being commoditized and marketing, propagation and business development considered the hard problems, I don't think it is correct to glorify the role of this "army of robots". And the costs for those tools add up, you know.

 

[roguehillbilly]

Meh.

It sounds so awesome. The gatekeepers disappear. Anybody can do anything. Computing is more accessible than ever.

As I see it ... a typical goldrush with very little gold that is easily accessible and big companies already making sure they are on track to capture the motherlode.

With software development being commoditized and marketing, propagation and business development considered the hard problems, I don't think it is correct to glorify the role of this "army of robots". And the costs for those tools add up, you know.

I respectfully disagree. It may look that way but there are untapped veins of gold in niche businesses. Big companies can't move as quick and won't bother to compete with companies that are flying under the radar. Multiple hundreds of thousands of dollars aren't worth it to them, but life-changing for entrepreneurs.

Definitely agree that software dev is easier than marketing, but I think it's still worth glorifying in the same sense that content is. Sure, tool costs add up, but you can be lean in 2020 much more easily than you could 10 years ago. Compute costs are going down every year. Yes, there are large companies spending 10's of thousands of dollars on cloud costs (I've worked for them). But they usually aren't focused on cutting their costs back. A single dev can host multiple projects very cheaply with open-source tools.

Why the negative tone?

 

[Digamma]

I'm confused.

Capital provides leverage?

This is the "prophetic" observation that went viral in "startup twitter"?

No wonder most startups fail.

I swear, every time I get curious and come back to this board...

> "business" skills (even though business isn't a skill)

It is, and it's the skill of knowing elementary notions like what capital is.

 

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[Guest-5ty5s4]

Awesome post, not sure why others haven’t liked it so much. The steps from labor to capital to digital and software are very nice!

The perspective on software and third party data is eye opening. The biggest and best companies of course use every type of leverage - many employees, OPM, and cutting edge automation / technology.

 

[Thinh]

While it sounds awesome and inspirational, it's unfortunately little more than truisms.

I've just read the Navalmanack, and I enjoyed it. But these statements are akin to saying:

Become an entrepreneur if you want to make boatloads of money.

An army of robots is great, and is definitely great leverage. But only if—and it's a big if—you use that army toward an effective purpose.

Yet what I read between the lines is: barriers of entry have been lowered. Yes, it's easier than ever to create and scale, but it also became accessible to anyone with a functional brain and a decent level of life.

Your post isn't bad advice. It's a good thing to keep these concepts in mind, and thanks for sharing them what you thought was worth sharing. They're also to take with a grain of salt.

 

[roguehillbilly]

I'm confused.

Capital provides leverage?

This is the "prophetic" observation that went viral in "startup twitter"?

No wonder most startups fail.

I swear, every time I get curious and come back to this board...

> "business" skills (even though business isn't a skill)

It is, and it's the skill of knowing elementary notions like what capital is.

I should add a bit of clarification since these are Navel's thoughts, not mine.
I do think capital can provide leverage in the form of interest or other ways (buying real estate at 20% down)

I do agree business is a skill but Navel goes on about actually business being composed of game theory, economics and a bunch of other things. I guess that sounds ok.

Your post isn't bad advice. It's a good thing to keep these concepts in mind, and thanks for sharing them what you thought was worth sharing. They're also to take with a grain of salt.

Yep, definitely, leverage is important when put towards the right things. Towards the wrong ones, it can be disastrous. I didn't mean to write business porn but I fear I might have

 

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[No.1]

I don't want to put the dreams of No.1 down, but I wanted to point out that software is accesible, but not very cheap to build and mantain as it may seem from the outside, and also... Software needs to be secure and reliable.

So guys, if you are really interested in that move (learning that kind of skills), it's great, but it's not that easy nor simple, since you need to know other extras that most of the people that teach the code don't mention, if it was that easy coders would be minimum wage, because their work wouldn't hold much value.

TL;DR
And what I mean is that a lot of people is selling out there a lot of easy to-do's that in the real world won't be useful or work like you expected.
I recommend you to try using a no-code software if you need something quick and simple.

And yes, I do code, creating a piece of minimum quality software is more than just that, and in the past I did IT security too, if you have an insecure product out there you can lose a lot of money and make other people lose a lot of money too, even if your web is secure you can get some kind of attacks that might cost you a lot of money in server-related costs.

Well, won't get into the details, but if you build a software solution you gotta watch out to know well what you're doing.

Hope I contributed with some knowledge to your post, and I will read the Naval's thread, never heard of it.

 

[Timmy C]

Twitter is an excellent place and is a platform I am gaining influence on right now.

His army of robots line is 100% correct.

You don't need something amazing to sell.

I have 9 bots right now and some are starting to move product.

Digital products.

The cost of running these is basically nothing.

Now what if I made 300 bots, replicated myself that many times....

300 bots, let's say 200 are making money around $500 a month.

That's $100,000 a year just by getting an army of robots that work for me.

 

[Andreas Thiel]

I respectfully disagree. It may look that way but there are untapped veins of gold in niche businesses. Big companies can't move as quick and won't bother to compete with companies that are flying under the radar. Multiple hundreds of thousands of dollars aren't worth it to them, but life-changing for entrepreneurs.

Definitely agree that software dev is easier than marketing, but I think it's still worth glorifying in the same sense that content is. Sure, tool costs add up, but you can be lean in 2020 much more easily than you could 10 years ago. Compute costs are going down every year. Yes, there are large companies spending 10's of thousands of dollars on cloud costs (I've worked for them). But they usually aren't focused on cutting their costs back. A single dev can host multiple projects very cheaply with open-source tools.

Why the negative tone?

Because there is nothing new in what you posted. Sounds like the cheapest kind of copywriting done for quickly written Udemy courses. I keep reading how easy it has become to become financially independent ... but I am arguably close to the cutting edge of that industry ... and see no opportunities worth pursuing without a team of at least 15 people.

As a lone wolf ... you face way too many challenges in too many different categories for a single person to work through. Love The Millionaire Fastlane in that regard. It tells you that it is hard and that you need to sacrifice a lot.
Nothing about software development is easy. Nothing about reaching customers with your product is easy. Nothing about running that business is easy. Thousands of software tools just make it harder to navigate the field.

 

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[Timmy C]

Great post OP, I don't know how this didn't get more traction.

 

[Raja]

@MJ DeMarco @Fox @Andy Black @Jon L
Would love your opinion on this amazing post

 

[Raja]

I respectfully disagree. It may look that way but there are untapped veins of gold in niche businesses. Big companies can't move as quick and won't bother to compete with companies that are flying under the radar. Multiple hundreds of thousands of dollars aren't worth it to them, but life-changing for entrepreneurs.

Definitely agree that software dev is easier than marketing, but I think it's still worth glorifying in the same sense that content is. Sure, tool costs add up, but you can be lean in 2020 much more easily than you could 10 years ago. Compute costs are going down every year. Yes, there are large companies spending 10's of thousands of dollars on cloud costs (I've worked for them). But they usually aren't focused on cutting their costs back. A single dev can host multiple projects very cheaply with open-source tools.

Why the negative tone?

Heck,
1 year free gcp and another year on free aws.
I guess it is sufficient.

 

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[roguehillbilly]

As a lone wolf ... you face way too many challenges in too many different categories for a single person to work through. Love The Millionaire Fastlane in that regard. It tells you that it is hard and that you need to sacrifice a lot.

I guess we'll have to agree to disagree.
No, it is not easy to do marketing, dev, product dev, etc. And yes, eventually it may make sense to bring someone on (or multiple people).

But, if you can't identify opportunities for a solo-preneur, I guess that is on you.

 

[Andreas Thiel]

I guess we'll have to agree to disagree.
No, it is not easy to do marketing, dev, product dev, etc. And yes, eventually it may make sense to bring someone on (or multiple people).

But, if you can't identify opportunities for a solo-preneur, I guess that is on you.

There is a huge disconnect between the messages:

- this is huge ... with this army of robots there is an endless ocean of opportunity to tap into for anybody who is willing to attempt it and
- it is really hard but a few people can make it big if they have unreal stamina and are extremely good at figuring out where to look

 

[Timmy C]

There is a huge disconnect between the messages:

- this is huge ... with this army of robots there is an endless ocean of opportunity to tap into for anybody who is willing to attempt it and
- it is really hard but a few people can make it big if they have unreal stamina and are extremely good at figuring out where to look

Your such a glass half empty on this forum and it's tiring.

 

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[TheKeywordsGuy]

Fan of Naval's tweet storm also, his podcast on it is pretty exceptional too.

I think the army of robots line is being taken a little out of context. It simply means that your input doesn't need to be proportional to your output. A software tool that makes $10k a month can provide a comfortable living, while the software does the "work" for you.

That isn't to say that making said software is easy, again, that just means that the input doesn't need to be proportional to the output. Coding said software might take two years, but it ends up making 10X what a coding job would've made during its lifetime, effectively giving you a much better ROI for your time. Same to be said for productized services, etc.

 

[roguehillbilly]

There is a huge disconnect between the messages:

- this is huge ... with this army of robots there is an endless ocean of opportunity to tap into for anybody who is willing to attempt it and
- it is really hard but a few people can make it big if they have unreal stamina and are extremely good at figuring out where to look

You don't have to make it big to change your life. You "only" need 100-200k in annual revenue to do whatever you want. Sounds like a lot, it isn't.