Alex Lieberman recently re-shared his Founder’s Journal podcast episode from November 2021 on The Power Of Leverage.
If you haven’t heard that episode or his podcast before, do check it out, they’re short but insightful.
According to Alex leverage is the process in which one unit of input (ie time, capital, or connections) is turned into many units of output.
This mental model of “gaining leverage” rang so true with what I’m seeing and hearing from across the coworking and flex workspace industry, as operators look to scale and optimize their operations.
In this post, I’ve shared some quick parallels and examples within flex to help more coworking and flex leaders incorporate the mental model into their plans, team training, and frameworks moving forward.
Naval Ravikant notes that there are two groups of leverage, namely permissioned and permissionless.
Permissioned leverage requires someone else’s permission and can be subject to another person or persons accepting a role within the process. Within this group are capital leverage, operational leverage, and knowledge leverage.
These are the usual kinds of forces you probably think of when asked to imagine or describe “leverage” at work.
Capital leverage is when cash is deployed to increase the output.
In flex examples of this could be VC funding, loans, or government grants. There are also new member-led funding options proving increasingly popular from crowdfunding, to pre-paid founding-member passes, to NFTs, and more.
Whilst the cash infusion can be very useful, it is often up to the investor, a bank, your members or a government to give you ‘permission’ and access to use it.
Operational leverage is your team working to achieve goals together.
Adding in full-time, part-time, or consulting assistance can increase the output and results of the flex workspace.
Again, you need to gain permission from these individuals in the form of convincing them to work for or with you.
Knowledge leverage is surrounding yourself with people who have experience or knowledge that may lack.
In flex, some examples are joining coworking alliances, or monthly meetups, or industry-specific newsletters and events.
The permission here is the fee or cost or access you need to get into and close to the experts you need or want to learn from.
All three are powerful drivers for flex businesses, but their impact isn’t purely limited by the permission needed, they’re also very very hard to scale for most of us. Many operators can’t infinitely raise money, hire millions of superb team members, and have whole industries of experts on speed dial.
Permissionless leverage is quite different here, in that it can be infinitely scalable, and in most cases won’t require any outside party to give permission or access to be able to gain that leverage.
Often, permissionless leverage is made possible through technology, and “works for you while you sleep”. Alex notes that there are two types here, the first being software leverage and the second being media leverage.
Software leverage allows tasks, processes, and workflows to be automated through code. It’s noted that “once you teach a computer to do something, it becomes virtually free for it to do it” again and again.
Examples in flex can be provisioning wifi for meeting room guests, checking in and out a day-pass user via WiFi connections, or securely syncing data and bookings with booking apps and aggregators.
Media leverage is that almost any person can create one piece of content and quickly turn it into multiple pieces of media, increasing reach and discoverability.
For flex spaces, this could be turning a recorded interview into content for all social channels via something like Canva, or spreading the results of one photoshoot into weeks worth of content and brochures and blog posts, or even recording quick interviews with members and using those internally and externally to show off the awesome people who work within your walls. Once the original content is created, it can spread via multiple channels, mediums, and formats, reaching more people whilst you work on something else.
So there you have it – understanding leverage for flex operators in 2 groups, 5 types, and a few examples for each.
Excited to hear and see how you plan to use and implement these forms of leverage to keep growing your flex space businesses.
Got something to add, or another podcast or mental model to recommend I check out?
Please do me know via a comment below, an email, or on twitter or LinkedIn.