38 Weeks To Get Rich: WK23 – Product Leverage is Egalitarian

38 Weeks to Get Rich

Welcome to the “38 Weeks to Get Rich”, where each week we’ll break down a section from Naval’s iconic tweetstorm and interviews on the topics of wealth, freedom, money, status, and happiness.

The full PDF is available here.

What follows is my summary & key takeaways to help you digest the 127 page document.



Week 23: Product Leverage is Egalitarian

Labor and capital are limited to the people who control those resources. But products reach global markets.


Fair & Equal Distribution.
Most services that require skilled human activity (teachers, chefs, lawyers, etc.) are not fairly or equally distributed. The rich and powerful are going to have better teachers, better cooks, and better lawyers. But code and software are a great equalizer. The poorest among us can see the same YouTube videos that Jeff Bezos can. Elon Musk, for all his money, doesn’t get any better Google search results than the family on welfare. Products built with code and software are egalitarian; they’re fair and equal. 


Product leverage is a positive sum game.
Unlike status goods (designer bags, private jets, etc.), technology is largely a positive-sum game. A Rolex gets its value from its high status. It’s high status because only rich people can afford it. If everyone could afford a Rolex, it wouldn’t be a Rolex; it would be a Casio.

But, no one is bragging that they have a gmail account. They’re free. And plentiful. And all of them are equal and the same.


The best products tend to be targeted at the middle class.
A Ferrari is cool. But unless you’re on a racetrack, a Ferrari is entirely impractical on actual roads–especially if there are potholes or low speed limits. So even though it may be (arguably) the “best” car; the sweet-spot is actually going to be a Tesla Model 3 or a Toyota Corolla because it’s mainstream. The R&D and production costs have been spread over the largest number of consumers possible.

The best products tend to be at the center, at the sweet spot, the middle class, rather than being targeted at the upper class.


Products with the most users tend to have the largest budgets. 
This is become of economies of scale. Movies are a great example.

The best movies are actually not going to be some obscure ones just made for a few rich people. They’re going to be the big budget ones, like Star Wars or the Marvel Universe, or Dune, where they have massive, massive budgets. They can just use those budgets to get to a certain quality level.

Then rich people, to be different, they have to fly to Sundance and watch a documentary. You and I aren’t going to fly to Sundance because that’s something that bored rich people do to show off. We’re not going to watch a documentary because most of them just aren’t actually even that good.


Products can make legacy leverage more egalitarian.
Code and products like GoFundMe, KickStarter, Reddit, or WikiPedia are taking information and capital and crowdsourcing it. Fundraising and labor are becoming permissionless. You don’t have to get approved by a loan-officer or a stuffy bank; you can crowdfund your next project.  You don’t have to pay an army of content producers, you can let users create their own content.


Tune in next week as we learn about business models that make the most of leverage. 


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