Why most businesses struggle: the leverage problem

Executive overview

Most founders chase messaging, marketing, and sales fixes when their business isn't growing. None of it works because the root cause is elsewhere. Leverage — the ratio of demand for what you sell to the supply of who else sells it — determines whether everything else in your business works or doesn't.

The goal: get as close as possible to selling water in the desert, where demand is extreme and you are the only supplier.

The two failure modes

• High demand, high supply: selling something people want, but so do 100 competitors — forces price competition and margin destruction
• Low supply, low demand: selling something unique that nobody actually wants (the "vegan dog food" problem)
• Leverage requires both: high demand and low supply simultaneously
• Most operational fixes (messaging, sales, HR) only help once leverage exists

Why standard market research fails

• Asking customers what they want surfaces only problems they can already articulate
• Competitors hear the same answers and build the same solutions
• Real leverage comes from revealing needs customers didn't know they had
• Start with an original solution, then ask whether customers would want it — not the reverse

The three Ds framework

Disagreement — look at where your personal views conflict with category norms:

• Every category has unquestioned patterns that nobody challenges
• Apple under Jobs disagreed that computers had to be purely technical, adding artistry and making computing accessible to a new audience

Difference — audit every way your business already differs from competitors, including weaknesses and accidents:

• Nintendo Switch was the least powerful console on the market
• Instead of competing on raw power, Nintendo asked what a lower-powered, smaller machine could uniquely offer — the result was portable party gaming, and the world's top-selling console

Duplication — take a value offering common in one category and bring it into yours:

• Lush cosmetics imported the concept of freshness from fresh produce
• They copied the visual codes of a fruit-and-veg market (chalkboards, crates, colour) into their stores
• A concept invisible in cosmetics became a clear differentiator