Leverage

In the car, we have been listening to a kids trivia podcast. My wife started the kids on this a while ago and they have since become addicted to it. The podcast is really cute and there is a mom that has her kids on to answer a bunch of trivia questions. It is gold for long car rides because the kids can learn some things while not finding something to fight about in the backseat.

Comparing the first few episodes of the podcast to the more recent ones, it is night and day in terms of advertisements. The podcast must be doing really well because there are not only lots of advertisements now, but there are some bigger named companies that buy the ad spots on the podcast. When the podcast first started, there weren’t many advertisements if any.

This led to a conversation about leverage on the drive home one morning with my 7 year old daughter E and 5 year old son C. We started talking about the podcast and how they wanted to try and do something similar. I encouraged them to start planning for one to see what they could come up with, but I also said that they should try their best to be consistent and persistent. It is really hard to keep going when you feel like things aren’t going your way or that what you are doing doesn’t seem to matter. In those moments, you have to keep pushing things forward and I’m sure that is what happened with the kids trivia podcast. They agreed.

I started to talk about how most of the inputs to the podcast are the same. They have to make the show. As things scale (in this case…they got more popular), the opportunities will open up and even though they are still making the show, they are earning a lot more money through advertisements now. That is called leverage. E and C both asked a few more questions to understand what leverage actually meant - to me, it was the byproduct of doing something consistently with the same inputs and getting drastically higher outputs.

As a quiz, I asked them what other actions constitute leverage. E thought about it a while and said exercise! That was spot on since doing the same workouts in a set amount of time usually made you stronger without having to increase your workout time significantly. I’m glad our previous discussions paid off since I talked about health and wealth as areas where leverage can apply. My job was done for the rest of the car ride!