You’ve heard it in every board room, every Zoom call, and every "thought leader" LinkedIn post since 2005. "We need to leverage our assets." "Let’s leverage this partnership." Honestly, the word has been beaten to death. It’s become corporate wallpaper—the kind of fluff people say when they want to sound smart but don't actually have a plan. But if you strip away the jargon, understanding what does it mean to leverage something is actually the difference between a business that treads water and one that scales exponentially.
It's about the "force multiplier."
Think about a literal lever. If you try to lift a 500-pound rock with your bare hands, you're going to break your back. You're using linear effort. But if you slide a sturdy metal bar under that rock and place a pivot point in the right spot, you can lift it with one hand. That is leverage. In a business context, it means using a specific tool, skill, or asset to gain a return that is significantly larger than the effort you put in. It’s about getting more out of what you already have.
Most people get this wrong because they think leverage is just "using" something. It isn't. Using a hammer to nail a board is just work. Leverage is using that same hammer to build a jig that lets you nail a hundred boards in the time it used to take to do ten.
The Mechanics of Growth: Moving Beyond Linear Effort
To really grasp what does it mean to leverage something, you have to look at the math. In a standard linear model, if you want $2$x the results, you put in $2$x the work. You work 80 hours instead of 40. You hire two salespeople instead of one. This is exhausting. It doesn't scale because humans have limits. We run out of hours. We run out of coffee.
Leverage breaks that 1:1 ratio.
Take Naval Ravikant’s philosophy on wealth. He’s famously argued that there are four types of leverage: labor, capital, code, and media. Labor is the oldest form—getting people to work for you. It’s also the messiest because humans are complicated. Capital is better; money is a "force multiplier" that doesn't complain about overtime. But the real magic in the modern world comes from products with zero marginal cost of reproduction. That’s code and media.
If you write a piece of software, you write it once. Then, ten thousand people can use it while you sleep. That is the ultimate answer to what does it mean to leverage something. You leveraged your initial time to create an asset that works independently of you.
Why Most Companies Fail at Leveraging Assets
I see this all the time with small businesses. They have a massive email list—ten thousand people who have raised their hands and said, "I like what you do." And then the business never emails them. Or they send one boring newsletter a month. They are sitting on a gold mine but they aren't using the tool.
They have the "lever" (the audience), but they haven't found the "pivot point" (the offer) to move the "rock" (the revenue).
True leverage requires three things:
- An Underutilized Asset: This could be data, a brand reputation, a specific piece of intellectual property, or even a relationship.
- A Mechanism: The strategy or technology that allows you to apply force to that asset.
- The Goal: A specific outcome that is much larger than the input.
If you’re just "doing stuff," you aren't leveraging. You're just busy.
Financial Leverage: The Double-Edged Sword
We can't talk about what does it mean to leverage something without touching on the world of finance. This is where the term actually originated. In finance, leverage is using borrowed money to increase the potential return of an investment.
Imagine you want to buy a house for $500,000.
🔗 Read more: Is the Stock Market Open on Columbus Day? Here Is How the Holidays Actually Work
You could pay cash. If the house goes up in value by 10%, you’ve made $50,000. That’s a 10% return on your investment. Simple.
But what if you use leverage? You put down $50,000 (10%) and borrow the other $450,000 from the bank. Now, if the house goes up in value by that same 10% ($50,000), you’ve doubled your money. You made a 100% return on your $50,000 investment.
That is the power of financial leverage.
But—and this is a huge "but" that many people ignore—leverage works both ways. If the house price drops by 10%, you haven't just lost 10% of your money. You’ve lost your entire $50,000 investment. You are "wiped out." This is exactly what happened during the 2008 financial crisis. Banks were "over-leveraged," meaning they had borrowed way too much money against assets that were actually losing value. When the pivot point broke, the whole system came crashing down.
Real-world experts like Nassim Taleb, author of The Black Swan, often warn about the dangers of "hidden leverage." It’s easy to see when you borrow money. It’s harder to see when your business depends entirely on a single platform like Facebook or Amazon. If you build your entire business on someone else's platform, you are leveraging their reach, but you are also vulnerable to their whims. If they change the algorithm, your lever snaps.
The Psychology of "Mental Leverage"
There is also a cognitive side to this. High-performers often talk about what does it mean to leverage something in terms of their own focus. It’s the Pareto Principle in action: 80% of your results come from 20% of your activities.
Most of what we do in a day is low-leverage. Checking email? Low leverage. Sitting in a status meeting? Extremely low leverage. Writing a piece of content that will attract customers for the next three years? High leverage.
If you want to move the needle, you have to ruthlessly cut out the "busy work" to make room for the "leverage work." It’s uncomfortable because busy work feels safe. It makes us feel like we’re accomplishing things. But deep down, we know we’re just moving the rock an inch at a time instead of using the lever to flip it over.
Real-World Examples of High-Leverage Moves
Let’s look at some actual brands that understood this concept deeply.
- Amazon and AWS: Amazon spent years building a massive internal infrastructure to handle their own e-commerce traffic. They realized this infrastructure was an underutilized asset. By opening it up to other companies as Amazon Web Services (AWS), they leveraged their internal cost-center into the most profitable part of their entire company.
- Starbucks and their App: Starbucks isn't just a coffee company; they’ve leveraged their customer loyalty into a massive financial play. Because people load money onto the Starbucks app, the company essentially has billions of dollars in interest-free loans from its customers. They leveraged a cup of coffee into a banking system.
- Influencer Marketing: A brand with a great product but no audience "leverages" an influencer who has an audience but no product. It’s a symbiotic use of leverage where both parties get more than they put in.
How to Identify Your Own Leverage Points
You probably have levers you aren't using right now. Everyone does.
Maybe you have a "boring" process in your office that you’ve perfected. That’s not just a process; it’s an asset. If you documented it and sold it as a consultancy framework, you’d be leveraging your expertise.
Maybe you have a relationship with a vendor that nobody else has. You could leverage that to get exclusive pricing, giving you a competitive edge that has nothing to do with how hard you work.
The key is to stop asking "How can I do more?" and start asking "What do I already have that I can use to get a bigger result?"
The Difference Between Scaling and Leveraging
People use these terms interchangeably, but they aren't the same. Scaling is the result. Leveraging is the method.
Scaling is what happens when your revenue grows while your expenses stay relatively flat. To get there, you must use leverage. You cannot scale a service-based business that relies entirely on your personal billable hours. Why? Because there is no leverage. You are the only tool. To scale that, you’d need to leverage a team, a digital product, or a proprietary software.
Common Misconceptions About Leverage
One of the biggest myths is that you need money to have leverage.
While capital is a great lever, it’s not the only one. In the creator economy, "permissionless leverage" is the big thing. You don't need a gatekeeper to tell you that you can write a blog post. You don't need a producer to give you permission to start a YouTube channel. You don't need a bank to give you permission to write code.
If you have a laptop and an internet connection, you have access to the most powerful levers in human history.
Another misconception: leverage makes things easy.
It doesn't.
Using a lever still requires effort. You still have to push down on the bar. You still have to do the work of finding the right pivot point. In fact, high-leverage work is often harder than low-leverage work because it requires more thinking, more risk-taking, and more patience. It’s easier to dig a hole with a shovel than it is to design an excavator. But once the excavator is built, the person with the shovel can never catch up.
Actionable Steps to Increase Your Leverage
If you want to stop spinning your wheels and start using these principles, you need a plan. Don't just read about it. Do it.
First, do an Audit of Assets. Sit down and list everything you have that isn't your time. Do you have a list of past clients? Do you have a specific software skill? Do you have a brand that people trust? Do you have $5,000 sitting in a savings account earning 0.1% interest? These are your raw materials.
Second, look for Media and Code Opportunities. Is there something you say to clients over and over again? Record it once. That’s media leverage. Is there a task you do every morning that takes 20 minutes? Find a Zapier automation to do it for you. That’s code leverage.
Third, evaluate your Relationship Capital. Who do you know who has the "rock" you want to move? Could a simple introduction leverage your network into a new revenue stream?
Finally, check your Risk Tolerance. Leverage, especially financial or brand leverage, involves risk. If you borrow money to grow, you have to pay it back. If you hire a team to leverage your time, you have to manage them. Make sure the "bar" you’re using is strong enough to handle the weight of the "rock."
Essentially, what does it mean to leverage something is the art of being "productively lazy." It’s the refusal to do things the hard way when a smarter way exists. It’s about finding the pressure points in your life and business where a small shove creates a massive landslide.
Stop being the person digging with their fingernails. Find your lever. Find your pivot. And start moving some mountains.
- Identify your "Zero Marginal Cost" asset: What can you create once and sell a thousand times?
- Audit your schedule: Delete one low-leverage task today and replace it with one hour of "lever-building" (systems, automation, or content).
- Review your partnerships: Are you providing leverage for someone else without getting any in return? Re-negotiate.
- Calculate your ROI on time: If you spent $500 to save 10 hours of work, what is those 10 hours worth to your business? If it's more than $500, that’s a leverage win.