Career Leverage and the Structure of Production

One way to think about careers is leverage.

It’s not something that gets talked about much, but it’s sneaky powerful. Most people think in terms of titles and salary when they think about success. This leads many to pursue jobs as doctors, lawyers, and managers at large firms.

Others think more in terms of control over schedule and more creative autonomy, so they might become freelancers, consultants, etc.

As different as those career paths are, they share a key constraint. Neither is highly leveraged.

Lawyers and freelance designers both charge by the hour. Doctors and corporate consultants both make money only when they’re working directly with customers.

There is nothing wrong with that. It’s probably preferable for most people, as there’s something clean and simple about earning directly for your work. These jobs are highly specialized and relatively high value, but it’s just as much a direct labor for pay model as pumping gas or digging ditches.

All those roles hit a ceiling: the amount of work you can put in. It caps out pretty fast.

But a highly leveraged career doesn’t have a cap. A leveraged career is more about what activity is being done, not how long and hard and how many times you’re doing it. The activity itself does not directly generate income. The activity generates something else that generates many times more of something else that generates many multiples of yet another thing that generates income from tons of people at once.

It’s not give a man a fish. It’s not teach a man to fish. Giving and teaching aren’t leveraged. It’s raise the money to buy the land to build the factory to make the rope that goes into the nets that help millions of people catch billions of fish. Leverage.

Most of us have to begin our careers in an unleveraged role. Maybe you bag groceries. Or maybe you become a lawyer. You can transition into a leveraged career if you train your brain to see it. The leverage-seeking lawyer might think, “OK, I’ve mastered creating this kind of legal document for this kind of client. Now can I build a franchise or a software product that does this repeatedly at scale?” Then you get stuff like LegalZoom. Leveraged activity springing out of mastery of a non-leveraged activity and some insight and investment.

I’m a big fan of the Austrian School of Economics, which focuses a lot on the structure of production, which is a fancy way of saying the long process of how stuff gets made. It’s the process of going from products (Here’s an apple), to tools (Here’s a ladder to reach more apples), to tools for making tools (Here’s a saw to cut wood for ladders), and on and on.  The deepening of the structure of production requires insight and foresight, since it adds ’roundaboutness’ to a straightforward task like apple picking. But it also adds massive leverage.

This is how you become massively wealthy and have a massive impact on the world. The best manager in the world can only manage so many people. Maybe a few hundred. But the person who builds the best tools for helping more managers do their jobs better can touch millions.

That’s leverage. If it appeals to you, chase it. Focus on tools, products, and processes that are very far back in the production process. So far back most people can’t see how they connect to the final act of consumption.

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Isaac Morehouse is the founder and CEO of Praxis, an awesome startup apprenticeship program. He is dedicated to the relentless pursuit of freedom. He’s written some books, done some podcasting, and is always experimenting with self-directed living and learning. When he’s not with his wife and kids or building his company, he can be found smoking cigars, playing guitars, singing, reading, writing, getting angry watching sports teams from his home state of Michigan, or enjoying the beach.

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