WHEN YOU'RE BUILDING YOUR LIFE

12. On Leverage Points

"You have a real life if and only if you do not compete with anyone in any of your pursuits." —Nassim Nicholas Taleb

Dear Kids,

Taking risk and making your own luck matters — but where you point that effort matters even more. That's what kept me up thinking this week, and what I want this letter to be about.

I'm writing this from Chengdu, where I've been working with some of the most brilliant young minds I've ever encountered. These students are taking eleven classes a term, can dissect hedge fund strategies before breakfast, build LLM architectures in their sleep, and discuss geopolitics with the sophistication of seasoned diplomats. In most ways that matter intellectually, they're running circles around their American counterparts.

And yet.

Two things — just two — quietly cap their potential more than any lack of talent ever could: English communication ability, and a passport that doesn't open the same doors. Remove those two constraints and their market value would multiply by five or ten times overnight. Same brain. Same skills. Different geography and language. Radically different life.

Last week one of these kids — a twenty-year-old — sat across from me and casually mapped out how transformer architectures could change high-frequency trading, then pivoted to discussing tail risk hedging strategies. He's genuinely sharper than half the people I knew at top American firms. He'll start at a local firm in China making $40,000, doing work that won't scratch the surface of what he's capable of. A different version of him, born with the same brain in a different zip code, would be getting offers from Jane Street and Citadel for fifteen times that. Same person. Two solvable problems standing between him and his ceiling: an accent, and a passport.

I sat there after dinner thinking about how unfair that is, and how clean an illustration it is of something I've been trying to put into words for years — that the game you play matters more than how well you play it.

The term itself — leverage point — I'm borrowing from Donella Meadows, whose Thinking in Systems I read in Beijing last winter on a recommendation from a Schwarzman classmate who was already done with the chapter on feedback loops by the time I got past the first one. Meadows worked at MIT on global systems modeling, and her insight is that complex systems don't respond uniformly to where you push them. They have a hierarchy of leverage points — surface knobs that barely move anything, and deep structural levers that change the whole behavior of the system when nudged. The lowest-leverage interventions, she says, are tweaking parameters (taxes, prices, subsidies). The highest-leverage ones are changing the goals of the system, or the paradigm out of which the system arises. The same thing applies to a life. Most people spend decades adjusting parameters — a slightly bigger salary, a slightly better title, a slightly nicer apartment — in a system whose goal they never paused to question. The real leverage was always two levels deeper.

The trap of competing without leverage

There's a Chinese word for what happens when an entire generation of brilliant people compete inside the same narrow channel: 内卷. Involution. Excessive competition for limited positions, where everyone works harder and harder for diminishing returns. A thousand brilliant students competing for a hundred positions. Each one studies an extra hour. Takes one more course. Sharpens one more skill. The irony is brutal — the more everyone invests in the same skills, the less valuable any single one of those skills becomes. Like an entire concert standing on its tiptoes. Nobody sees better. Everyone's feet hurt.

This is what happens when you compete without leverage. You run faster and faster on a treadmill that speeds up to match your pace.

The opposite of involution isn't laziness. It's stepping off the treadmill and asking whether you should have been on it at all.

What actually counts as leverage

A leverage point isn't necessarily the hardest skill to acquire or the most impressive thing on a résumé. It's the variable that, when you change it, disproportionately changes everything downstream. Sometimes it's almost embarrassingly simple.

Language as leverage. The difference between B2 and C1 English for my students isn't grammar — it's the difference between a $30,000 salary and a $150,000 one. Not because English is worth five times what Mandarin is. Because it unlocks access to the markets where their other skills can be priced at what they're actually worth.

Geography as leverage. Being physically present in Silicon Valley, London, or Singapore isn't about the air being different. It's about being in the rooms where the conversations happen — the network effects, the accidental coffees, the who-do-you-know economy. For a stretch of your career, showing up may be 80% of the game.

Timing as leverage. Being competent in AI in 2024 is valuable. Being competent in AI in 2014 was world-historical. Same skill. Different window. Two completely different lives.

You can be the best in your zip code at the wrong skill, in the wrong place, at the wrong time, and end up with nothing to show for years of effort. Or you can be merely competent at the right skill, in the right place, at the right time, and the wind itself will move you forward.

Playing the right game beats playing well

The clearest way I can put it, kids: being great at the wrong game is far worse than being average at the right one.

Imagine becoming the best typewriter salesperson in the world in 2025. It doesn't matter how skilled you are, how charming you are, how much you out-hustle your colleagues — you're playing a dying game. Meanwhile, someone with average skills selling AI infrastructure, or building in the energy transition, will outperform you by orders of magnitude — not because of talent, but because of the slope of the field they happen to be standing on.

A useful test: look for games where the wind is at your back. Some trends compound for decades — the shift of computing onto everything, the aging of populations, the migration of value into software, the next emerging market that no one's looking at. When you stand inside an inevitable trend, you don't have to be extraordinary. You just have to be competent and patient. The current does the rest.

Consider the inverse. Someone who picked, in 2010, to become the best Blockbuster regional manager. Hardworking, ethical, deeply competent. The game itself was disappearing under their feet. No amount of personal excellence would have changed the outcome.

I think back to choices in my own twenties that look smart only because of where the wind was blowing. The luckiest career bet I ever made wasn't a brilliant insight. It was being curious about AI in 2017 — at a moment when the field still felt small and slightly embarrassing, when most of my friends were optimizing for finance or consulting. I wasn't smarter than they were. I just happened to be standing in front of a wave that no one had quite seen the size of yet.

Be top 20% in three things

If you can't be the best in the world at one thing — and almost no one can — there's a structurally better game.

Scott Adams (who created Dilbert) calls it the Skill Stack. Being the best writer in the world is essentially impossible. Being the best public speaker is essentially impossible. Being the best at understanding, say, the biotech industry is essentially impossible. But being in the top 20% at any one of those? Plausible with a few thousand hours of work.

The trick is that the intersections are where the world has roughly one of you.

A founder who can also write clearly is rare. A writer who also understands biotech is rare. Someone who's in the top 20% at all three? Functionally unique. There may be five of them on Earth. And whatever niche their combination opens up, they are — by definition — the best in the world at it. Not because they're a genius at any single component, but because no one else is standing where they're standing.

This is the gentlest math you'll ever encounter for building an asymmetric life. Don't try to be the best at the thing everyone is competing for. Stack three things you're naturally good at, that combine in a way no one else is combining, and let geometry do the work.

The Japanese have a similar idea built into the concept of ikigai — the intersection of what you love, what you're good at, what the world needs, and what someone will pay you for. Where those four overlap is supposedly your reason for getting up in the morning. I think it's a fancier version of the Skill Stack. Same spirit. Stop trying to be a better version of someone who already exists. Be the only version of you that exists.

Peter Drucker, in The Effective Executive, arrives at the same conclusion from the opposite direction. His central question for any person at work isn't what should I do? but what can I contribute that no one else here can? I keep returning to that question. It cuts through the noise of every promotion ladder, every résumé competition, every comparison spiral. The contribution question is just the leverage question dressed differently. It asks: where does your unique combination — your background, your taste, your obsessions, the things that have happened to you — produce a kind of value the room can't get from anyone else in it? When you can answer that honestly, you've found one end of your leverage. Most of the wasted effort I've watched people pour into their careers came from a refusal to ask it.

The supply-and-demand truth

Now for a slightly cynical observation that I've found to be reliably true: sometimes your leverage doesn't come from being exceptionally good. It comes from being scarce where you happen to be.

Being a semi-attractive woman in Silicon Valley engineering circles is leverage created by ratio, not by excellence. Speaking fluent Mandarin in Montana is more valuable, day-to-day, than speaking it in Beijing. Having U.S. startup experience in Southeast Asia is instant credibility you couldn't manufacture in San Francisco no matter how hard you tried. The market doesn't reward absolute skill — it rewards relative scarcity in context.

This isn't gaming the system. It's understanding that value is contextual. And the corollary is that one of the most powerful career moves you can make is moving — to where the thing you happen to be becomes scarce.

Try to be a great surfer in Kansas, you'll have a hard life. Be the only person in Lagos who can run a Western M&A process — you'll write your own ticket.

The 2x2 to keep in your head

Most people never step back to think about what they're optimizing. Here's the simplest mental map I know — a two-by-two of skill versus competition.

High skill, high competition. The trap. Investment banking analyst programs. Top consulting firms. Pre-med. The Chinese gaokao. The work is hard, the people are excellent, the rewards exist — and the entire field is dense with people who could replace you. The trap is seductive because it feels virtuous. You're working hard. You're competing against the best. But you're still in the trap.

High skill, low competition. The sweet spot. Early crypto development before the wave. Being deeply technical in a creative field. Speaking Mandarin in African markets. This is where outsized outcomes live — where your skill compounds inside a space that hasn't been crowded yet.

Low skill, low competition. Hidden opportunities. The willingness to show up in places others won't. The willingness to learn an "unsexy" industry. The willingness to do the unglamorous, careful, present work that smart people dismiss as beneath them. Often a quietly excellent place to start.

Low skill, high competition. The graveyard. Most app ideas. Day trading. The race to be an influencer. High activity. Low edge. Avoid.

The brilliant Chengdu students I keep returning to are caught in the first box — the trap. They are competing ferociously, with extraordinary skill, for a vanishingly small set of local positions, when the global market for what they can do is ten times the size and a fraction as dense. They're not wrong about anything individually. They just haven't asked whether the game itself is the right one.

The uncomfortable truth about unearned leverage

I want to be honest with you about something most people don't say out loud.

Massive outcomes often come from arbitrary advantages, not merit.

How many mediocre programmers got wealthy just by being early to crypto? How many average professionals became "experts" by being the only Western face in an Asian market, or vice versa? How many careers were made by proximity — happening to live near the right people, go to school with future founders, be in the right city at the right time?

Being born with an American passport is probably worth more than an MIT degree. The brilliant students in Chengdu who work twice as hard might earn a tenth of what an average American developer earns, simply because of where their mothers happened to give birth to them. Is that fair? No. Should you optimize for it anyway? Yes. Both can be true. You can simultaneously work to make the world more meritocratic and acknowledge that, right now, it isn't.

What you do with unearned leverage is the only honest test of character. Use it to pull others up — especially the ones stuck behind artificial barriers you happened to be born past. But don't pretend the barriers don't exist. And don't waste the leverage you have by playing a game that doesn't require it.

The contrarian-and-right question

Peter Thiel asks: what important truth do very few people agree with you on?

That question is essentially a leverage finder. Being contrarian alone is easy — just disagree with everyone. Being right alone isn't enough — if everyone else is also right, there's no advantage. But being contrarian and right is where fortunes and futures are made.

The brilliant students I'm working with in Chengdu are all right about the same things. AI is important. Technical skills matter. Hard work pays. They're not wrong — they're just all right in the same direction, competing for the same prizes. Their contrarian-and-right move would be to realize that their geographic and linguistic constraints matter more than their technical excellence — that learning to tell stories in English may be worth more than another algorithm, and that being good enough technically while being exceptional at cross-cultural bridge-building would beat being technically perfect at something a thousand other people are also technically perfect at.

Here's how I'd train myself to find contrarian leverage points:

What do smart people in your field dismiss as too simple to matter? (Often: clear writing. Sales. Showing up in person.)

What do your peers think is beneath them? (Often: unglamorous industries. Secondary markets. "Old" technologies undergoing renewals.)

What assumptions does everyone in your field share that might be quietly wrong?

What's considered impossible but might just be really hard?

The best leverage often comes from being contrarian about the game itself, not just about the moves inside it. Everyone is trying to be a better chess player. You're asking whether poker might be a more valuable table to sit at.

The cost of optimizing for leverage

I want to be honest about what optimizing for leverage actually costs, because the people selling you this idea rarely are.

It might mean leaving your hometown while your friends stay. Being the only one who looks like you in rooms for years at a time. Your parents not really understanding what you do. Missing birthdays. Losing touch with friends who didn't move. Sometimes wondering, on a bad night in a foreign city, whether you're playing the game or whether the game is playing you.

Leverage without purpose is just sophisticated emptiness. Get leverage, yes — but know why. Use it to build something that's actually yours. Don't just become an unusually well-positioned person playing a game whose rules you never paused to question.

Questions to ask your own life

As you navigate your path, kids, here are the questions I'd come back to:

What's valuable that I can uniquely achieve? Not what's valuable that everyone is chasing — what's valuable that my particular combination of skills, background, and position lets me reach?

Where would my skills be scarce instead of dense? Sometimes the highest-leverage move isn't getting better. It's moving.

Who am I competing against, and for what? Am I one of a thousand people fighting for the same prize — or could I find a smaller table?

What's becoming valuable that others haven't noticed yet? The best leverage points are often invisible because they're emerging, not established.

What single constraint, if removed, would multiply my value? Like my students with English — what's the bottleneck that, if you knocked it out, would change the whole equation?

And: am I playing the right game at all, or am I just playing well?

A short closing

Most of the rewards in life will flow not to the most talented person, kids — but to the most correctly positioned one. Sometimes that's brutal. Mostly it's just how the math works.

So develop skills, but develop leverage. Pick the right game before you try to win it. Find the intersections where you're nearly alone. Stack the three things only you have, and build a life on the joint. Move when the place you are isn't the place your skills are scarce. Use your unearned advantages, when you have them, to pull other people through the doors you walked through.

And when the world feels overwhelmingly competitive — when you feel like everyone is studying harder, building faster, posting more — take a breath, step back from the treadmill, and remember the question that the Chengdu students never quite asked themselves.

What game am I playing, and is it the right one?

Love,

Dad

P.S. — If you take three things from this letter: learn to communicate clearly in English. Get comfortable being uncomfortable in new places. And practice the habit of asking, every six months or so, whether the game you're playing is still the one you'd choose. Everything else builds from those.