Leverage creates outsized returns.
It can give us hundreds, or thousands, or millions of times more output for each unit of input.
And as you'd imagine, this creates extreme inequality. Winners win big, and losers are rarely noticed.
But there's more to it than that.
Not only do bigger opportunities imply inequality, they also require more upfront investment. A lemonade stand can be opened in an hour, but the next big tech empire might take decades to reach its potential.
This means long periods of time, burning through resources, with no concrete signs of success.
And so, to succeed, we need long time horizons.
But to have long time horizons, we first need to survive. Building goodwill is great, but we can't eat thank-you notes.
A common solution is to work from the bottom up.
This means progressing through smaller, less leveraged opportunities to create cash flow for larger ones.
There are two benefits to this approach:
1) We're less likely to starve
2) We discover unknown unknowns in the process
It might feel like this comes at the cost of speed. But maybe the extra lessons make us more efficient to compensate.
And besides: if we have a long time horizon, it's irrelevant.
But where to start?