0:00

Okay, I have a serious question for

0:02

all you proud solopreneurs out there, and I

0:05

want you to think about it and answer it very

0:07

carefully. Jeff Bezos started

0:09

Amazon, an online bookstore, in 1994 out of his

0:11

garage with a $250,000 investment

0:15

from his parents. Back then, he

0:17

was what you might term a solopreneur. Over

0:19

the last 30 years, Bezos battled clones,

0:22

copycats, and competition to build

0:24

the internet behemoth we know today as

0:26

Amazon.

0:27

My question is this, why

0:29

is the number of solopreneurs who have come anywhere

0:31

close to Emulidium so small? Actually,

0:36

you could replace the name Jeff Bezos with Larry

0:38

Page and Sergey Brin or Mark Zuckerberg

0:41

and the question is still valid.

0:43

Let's put it this way, how is it that the richest

0:45

people in the world are not working as hard

0:47

as you, but they're still printing money?

0:51

What are they doing differently? Well,

0:52

let's find out, shall we? Please

0:54

take your seats and fasten your seatbelts. The

1:01

next generation of successful founders in this digital

1:03

age of entrepreneurship will leverage their audience

1:05

to launch, build, and

1:08

scale their brands. First

1:10

Class Founders explores this golden intersection

1:13

of audience building and company building

1:16

with proven strategies to grow both your audience,

1:19

which is your distribution, and your brand,

1:22

which is your product, because those who

1:24

can master both will create a category of

1:26

one. Hi, my name

1:28

is Yong Soo Chung and I'm a serial entrepreneur who

1:30

bootstrapped three successful businesses from zero

1:32

to $20 million over eight years. On

1:36

this show, you'll learn timeless lessons

1:38

from world-class content creators, startup

1:40

founders, and CEOs. You'll also

1:42

hear tactical tips and strategies from me. Are

1:45

you ready? Then

1:46

let's begin.

1:54

Today's episode of First Class Founders is a solo

1:56

flight. That is, I'm going to be sharing

1:58

with you my thoughts on how to be a successful founder.

1:59

the i'm a subject that i think you will benefit

2:02

tremendously from how you're

2:04

missing out on the opportunity to earn millions

2:07

as it's open or yeah

2:09

unless are you a secret of saw the richest people

2:11

are making more money than you but

2:13

working way less than you would

2:15

work was no i'm not a string

2:18

you along for thirty minutes and then tell you they're

2:20

lucky or they work hard or they

2:22

put their money to work for them assess

2:24

and thirty the secret right away the secret

2:26

is that they're using leverage differently

2:29

than you

2:30

what is edwards well

2:32

if you don't know that then you better listen carefully

2:34

for the next thirty minutes because i plan to tell

2:36

you everything about leverage were

2:38

first look at what it means to utilize leverage

2:41

then we'll learn about the to touch leverage

2:43

permission to and permissionless leverage

2:46

then also you how you're probably

2:48

wasting a ton of leverage suddenly

2:51

most importantly i'll see what the biggest

2:53

mistake you're making us or for north and

2:56

mark my words you will agree

2:58

with me here's a sense in

3:00

both the person holding company so jet

3:03

setters less just a slight ready for takeoff

3:05

and

3:10

asked

3:12

before we begin we teamed up with cyber

3:14

paused to bring you a quick three may cyber

3:17

visual summary of this episode on leverage

3:19

to help you consume faster understand better

3:22

and retain more see idea that incites you

3:24

can grab a hyper visual summary for this week's episode

3:26

on leverage as first class honours dot com

3:29

slash cyber visuals i

3:32

let us or with a bit of history lesson first wait

3:35

don't see why me to said because all we bring

3:37

this back to the concept of leverage

3:39

in a minute or on the a team censor yourself

3:42

the industrial revolution swept through europe

3:44

as a time when he was gathering steam in europe

3:47

the united states was still primarily agrarian

3:50

the american frontier was still be smart

3:52

and the west was very much so

3:54

he says while but

3:56

with all that as far as in kinda slowly

3:59

growing demand for resources and since

4:01

the West was pretty much wild, these resources

4:04

needed to be transported across the entire

4:06

continent. Then

4:08

at the turn of the 18th century, iron,

4:11

steel, textile and other

4:13

industries sprung up and the Industrial Revolution

4:15

had finally jumped across the pond. The

4:18

mushrooming of canals and railroads contributed

4:21

massively to the economic growth. And at

4:23

the forefront of this economic growth were legendary

4:25

names such as Andrew Carnegie, John

4:27

D. Rockefeller, Henry Ford, Justin

4:30

and Mafou. We all know how they got rich.

4:32

They invested their money and other people's money in

4:34

industries such as steel, railroads and

4:37

automobiles. They hired cheap

4:39

labor to work in their factories and made

4:41

significant profits. I know I'm skipping

4:43

a lot of the fine print here but that was essentially

4:46

the blueprint to their wealth. What we

4:48

are looking at here is called leverage,

4:51

specifically capital leverage and

4:53

labor leverage. In a tweet storm

4:55

or as we now call it a Twitter thread,

4:58

back in 2018, Naval Ravecon

5:00

shared a series of tweets beginning with a wonderfully

5:03

succinct sentence, how to get rich without

5:05

getting lucky. This became the basis

5:08

for a book compiled by Eric Jorgensen

5:10

called The Omynast of Naval Ravecons,

5:13

a book that you should definitely read. Anyways,

5:15

in the tweet storm, Naval spoke about four

5:17

types of leverage, capital, labor, code

5:20

and media. Naval used the words leverage

5:23

because the Greek mathematician Archimedes

5:25

once said, give me a large enough lever

5:27

and I shall move the earth. In

5:29

other words, if you have enough leverage, you can

5:32

really do amazing things often without

5:34

breaking a sweat. But in terms of

5:36

wealth creation, what Naval was saying was

5:38

this. If you want to create wealth, you

5:40

need to do one of four things. One,

5:43

you can invest money into it, buy

5:45

low and sell high. This is capital leverage.

5:48

Two, you can hire people to do

5:50

some or all of your work. This is

5:53

labor leverage. Three, you

5:55

can develop something yourself. This is code

5:58

leverage. Four, you can do it. You can

6:00

create content and publish it. This

6:02

is media leverage. The

6:04

Carnegie's and the Rockefeller's, as you will now agree,

6:07

used capital and labor leverage to

6:09

grow their wealth. I said most people who made their

6:11

fortunes before the 1980s. In the

6:13

1980s, the internet was born. In

6:16

the 1990s, the world wide web

6:18

came into existence. And

6:22

with it came two new forms

6:25

of leverage, code and media. Here's

6:28

the thing. Code and labor require permission.

6:30

You need permission if you're planning to use someone else's

6:33

money as capital. You need to convince

6:35

another person to work for you if you plan to hire

6:37

them as labor. But code and media? Thanks

6:40

to the internet, they are the exact opposite. They

6:42

are permissionless. You don't

6:44

need anyone's permission to write code that solves the

6:46

problem. Similarly, you don't need

6:49

anyone's permission to create content. For

6:51

example, a newsletter, a podcast, a

6:53

YouTube video, or any other type

6:55

of media. I mean, that's how Mark

6:57

Zuckerberg made his first million. That's how

6:59

Larry and Sergey made their first million.

7:02

That's how I made my first million. All

7:04

of us were practically solopreneurs when

7:07

we made our respective first millions. Heck,

7:09

you will probably be the same, a solopreneur,

7:12

when you make your first million. But

7:15

maybe you don't have to be. Maybe, just

7:17

maybe, you can make your first million a lot

7:19

quicker. Interested? Good, because

7:22

a short while from now, I'm going to tell you about the importance

7:24

of permissionless leverage on the path to your first

7:26

million and how you might be wasting

7:28

amazing leverage without even realizing it. But

7:30

first,

7:31

I want to take this wonderful opportunity to tell you

7:33

about our sponsor for this episode, Swell

7:36

AI.

7:46

Quick question. Have you checked out Swell

7:48

AI yet? You know how I'm always

7:51

looking for ways to streamline my podcast production

7:53

process? Yeah, so I recently

7:55

began using Swell AI.

7:57

Let me tell

7:59

you.

7:59

It's like having a mind reader as an assistant.

8:02

I use it to write show notes, pull the best

8:05

parts of the episode into an organized summary, optimize

8:08

the episode titles for high engagement, and

8:11

transcribe the whole entire episode.

8:15

And the best part? All of this gets done

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instantly using the power of AI. Can

8:21

you imagine the amount of time I save? Yay! Go

8:24

on, give Swale AI a try. I'll

8:28

leave a link in the show notes.

8:31

Okay, now let's get back to our episode. Thank you

8:33

and enjoy your flight.

8:40

Before the break, we discussed Naval Ravikant's

8:42

concept of the four types of leverage, and

8:45

I claim that maybe you can make

8:47

your first million a lot quicker. Well,

8:49

the secret to that is permissioned

8:52

leverage. Yup,

8:56

you heard me right, and I fully understand

8:58

that I'm contradicting myself here a bit, but bear

9:00

with me for a moment, and all will become clear

9:02

shortly. First, let me backtrack

9:04

a little bit so I can explain this a bit more clearly.

9:07

And you should definitely pay attention to this part.

9:09

The internet brought in permissionless leverage in

9:11

the form of code and media, which

9:14

democratized entrepreneurship. Anyone

9:16

who could either code or create content now

9:18

had the option of building a business for themselves using

9:21

these two types of leverage. And I

9:23

predict that the next generation of successful founders

9:25

will emerge primarily from this permissionless

9:27

leverage. The old ways of relying solely

9:30

on capital and labor for leverage are no

9:32

longer applicable. New ways to build

9:34

products using code and media and distribute

9:36

them to willing consumers. Added

9:38

advantage is the fact that you don't incur any

9:41

additional distribution costs when you utilize the

9:43

leverage afforded by code and media. It

9:45

costs you nothing in terms of both time

9:48

and money to produce additional copies

9:50

of your product. Your investment remains the

9:52

same whether you're producing for one customer or

9:55

one million customers. Compare

9:57

that to capital and labor intensive leverage.

13:31

in

14:00

Brisbane, California, while having direct

14:02

access to our team on site.

14:04

We take great pride in our customer experience. Just

14:08

ask our current partners. They absolutely

14:10

love us. GrowthJet

14:12

is the 3PO that I wish I had when I launched

14:14

my own brand, Urban EDC. If

14:17

you have an e-commerce shop, check out GrowthJet and

14:19

hit me up at growthjet.com.

14:22

Thank you and enjoy your flight.

14:25

And while you do that, I'll queue up the final

14:27

part of this episode, in which I reveal the hack, the

14:29

optimal way of utilizing all four

14:31

forms of leverage. Are

14:38

you curious yet? If you follow me on X, or

14:41

if you already heard of episode 48, featuring

14:43

Nick Huber, you already know what this hack

14:45

is. It is a personal holding

14:47

company. Now,

14:50

before I launch into some details, I must make

14:52

it absolutely clear that I'm not a financial

14:54

advisor or a tax attorney, and none

14:56

of what I'm about to say constitutes financial or

14:58

legal advice. I'm merely sharing my

15:01

experience of building my businesses over the years. I

15:03

will not be held liable if you take any of my thoughts

15:06

as advice and act on it.

15:08

That said, let's talk a little bit about what

15:10

it means to have a personal holding company.

15:13

A holding company is a company that holds

15:15

other companies. As of this podcast,

15:18

I hold three companies, Urban EDC, Spotted

15:20

by Humphrey, and GrowthJet. And

15:23

you might be thinking, well, that's not new.

15:25

Tons of people do that. Well, not

15:27

in my case. One, usually,

15:30

holding companies are owned by several entities

15:32

or individuals. I own 100% of my

15:34

holding company, which

15:36

has all three companies I just mentioned. Two,

15:39

each of the three companies is very personal

15:42

to me. I started each of them specifically

15:44

to address a particular aspect of my own

15:46

life. I started an e-commerce

15:49

site called Urban EDC because I'm crazy

15:51

about EDC, everyday carry gear, and

15:53

I found other EDC enthusiasts like

15:55

me. I started a dog

15:57

boutique called Spotted by Humphrey a

16:00

master fan following on Instagram. A

16:03

few minutes ago, I told you why I started

16:05

my third-party logistics company, Growth Jet.

16:08

And now, I'm starting the first-class founders podcast

16:11

and newsletter as a way to share these thoughts on entrepreneurship

16:13

with the rest of the world. Each

16:16

of these ventures was intended to fulfill a very

16:19

specific need gap, either personal

16:21

or entrepreneurial. And each one of them

16:24

is incredibly personal due to being closely

16:26

associated with my hobbies, which makes them so

16:28

much more than just numbers and a balance sheet for me. No,

16:31

it ensures that I'm fully invested in them and gives

16:33

me the drive and enthusiasm I need

16:35

to make them work for me. While

16:38

the concept of a holding company has been around for a while,

16:40

this concept of having a personal holding

16:42

company is pretty new. And I'm

16:44

seeing more and more new age entrepreneurs

16:47

following this path of setting up personal

16:49

holding companies. For example, Nick

16:51

Huber employs a similar model himself

16:54

as he explained in episode 48. When

17:23

you think about it, my personal holding company is actually

17:26

the perfect combination

17:46

of all four types of leverage. Capital,

17:50

labor, code,

17:54

and media. I use code

17:56

and media leverage to create my businesses. I

17:59

use social media to build my brand, and find

18:01

customers for my businesses. Then, once

18:03

my businesses begin taking off, I switch

18:06

from the solopreneurship model and infuse the

18:08

traditional leverages of capital and labor to

18:10

grow them even further. Finally,

18:13

once they become somewhat self-sustaining, I

18:16

find an operator who I can trust to run

18:18

the business and hand it over to them. Don't

18:20

believe me? Well, how about this? My

18:22

first venture, Urban EDC, brought in $3.3 million

18:25

last year. I

18:28

spent literally zero minutes day-to-day working

18:30

on it. All of the day-to-day work was handled

18:32

by my very capable general manager. All

18:35

of my businesses have similarly capable GMs, and

18:38

eventually, I might decide to do the same with first-class

18:40

founders too. The big takeaway for

18:42

this episode? Solopreneurs, leverage

18:45

is your friend. It's how the rich get

18:47

rich. Don't fight it. And

18:50

if you care more about maintaining your lifestyle than money,

18:52

I'd argue that hiring a GM frees

18:54

up more of your time than doing everything yourself

18:56

as a solopreneur. How do you deploy leverage?

18:59

Start with digital leverage first. That's code

19:02

and media. Then, move

19:04

up the leverage ladder and work on utilizing labor

19:07

and capital. One more thing. If

19:09

you want to dig deeper into leverage, I made

19:11

a special bonus segment just

19:13

for premium members of first-class founders. Premium

19:16

members at this very moment are listening to me giving

19:18

highly specific and tactical advice

19:21

on how to better utilize the four types of leverage

19:23

we spoke about during this episode. I

19:26

also go into more detail about how to structure

19:28

your personal holding company. Want

19:30

to become a premium member? Go to firstclassfounders.com

19:33

slash join. Okay,

19:36

I'm guessing that right now, you're probably eager to start

19:38

your own business, set up your own personal holding company,

19:41

and start on your journey to your first million.

19:43

Well, I have just the right episode for you to check

19:46

out. Open your podcast player and go

19:48

to the first-class founders page. Scroll

19:51

down to episode 25. It

19:54

is titled, How to Turn Your Site Hustle into a Million

19:56

Dollar Business as a Creator. I've

20:00

outlined a series of seven clear steps you

20:02

can take to go from having just a side hustle

20:04

to building a business around it that can earn you

20:06

your first million dollars. Lighten

20:09

it up next while I tell you what to expect

20:12

in the next episode of First Class Founders. And

20:20

that wraps up today's show. In the next episode

20:22

of First Class Founders, we speak to Clifton

20:24

Sellers. Clifton was in personal

20:27

debt before he jumped on X and climbed his

20:29

way into one of the biggest ghost writing businesses

20:31

on X. Clifton revealed the secrets on

20:33

what it takes for a personal brand to grow on X. This

20:36

is an episode you don't want to miss.

20:42

If you're a new listener and you enjoyed this episode, you

20:45

can add your voice to the show by leaving a message

20:47

on firstclassfounders.com. You can

20:49

also follow the show by going to firstclassfounders.com

20:52

and clicking on the link that matches your preferred podcast player

20:54

like Apple Podcasts or Spotify. One

20:56

last thing before I go, could you head over to firstclassfounders.com

20:59

slash review and leave the podcast a five

21:01

star review please? A five star review helps

21:04

build credibility which helps me get bigger

21:06

and better guests. I'll leave a link in the

21:08

show notes to leave us a five star review. Thank

21:10

you so much. I'll see you in

21:12

the next episode of First Class Founders.