Why does Naval say, 'Once you have leverage, judgment is key'?

Okay, this is a fantastic question, touching on a core principle of Naval Ravikant’s philosophy. Let's drop the abstract theories and talk about it in plain language.

Why Does Naval Say "Once You Find Leverage, Judgment Becomes the Most Critical"?

Imagine you want to take your idea, product, or service from reaching 10 people to reaching 100,000 people. That "from 10 to 100,000" process requires a tool to amplify your efforts, and that tool is Leverage.

Step 1: First, Understand What "Leverage" Is

In Naval’s world, leverage mainly comes in these forms:

Labor Leverage: This is the oldest leverage. You're the boss; you hire 100 people to work for you, and your output is amplified 100 times. But this leverage is hard—management is a pain.
Capital Leverage: This is using money to move bigger resources. You use $1 million as seed capital to leverage a $10 million bank loan to build a factory. It’s good leverage, but requires significant initial capital.
Code & Media Leverage: This is Naval’s favorite and the most accessible leverage for ordinary people in our era.
- Code: You write a piece of software, an app. Once developed, it can serve thousands, even millions, of people around the clock with almost no extra cost to you.
- Media: You record a video, write an article, produce a podcast. Once released, it can be viewed, read, or listened to by countless people repeatedly. The influence can grow exponentially, while you only put in the initial creative effort.

See? Leverage is, fundamentally, a "multiplier." It can amplify your personal effort and influence by hundreds or thousands of times.

Step 2: Now, What is "Judgment"?

Judgment, simply put, is decision-making skill.

It’s not clever tricks, but an "intuition" or "wisdom" formed through deep thinking, broad reading, and long-term experience. It helps you answer questions like:

Direction: What should I actually do? Which path holds real long-term value?
Strategy: How should I approach this? Fast or slow? Do it myself or collaborate?
Trade-offs: When opportunity and risk appear together, which do I choose? Which do I give up?

If leverage is a powerful sports car, then judgment is your steering wheel, accelerator, and brakes.

The Critical Step: Connecting "Leverage" and "Judgment"

Now, put these two things together, and the answer becomes clear.

Because leverage is a "multiplier," it indiscriminately amplifies everything you do.

This means:

A good decision + Powerful leverage = Massive success

For example: You have excellent judgment and correctly identify a huge potential in the niche market of "providing emotional value to pet owners" (that’s your decision). Then you use media leverage, consistently creating high-quality, heartfelt pet videos. The platform’s algorithmic "multiplier" recommends your videos to millions of targeted users; you quickly become a head influencer and achieve massive commercial success. One correct judgment, amplified by leverage, brings astonishing returns.

A bad decision + Powerful leverage = Irreparable disaster

Another example: Your judgment is faulty—you think spreading rumors, shock-value content, or stirring division is the fastest way to gain followers (a terrible decision). You also use media leverage, and your content spreads virally, becoming instantly notorious. Result? You get banned, suffer online attacks, or even face lawsuits. Leverage has hurled you into the abyss faster than you can imagine.

This is the essence of Naval's statement:

When you only have a small hammer (no leverage), a bad decision just means hitting the wrong nail—you get a blister. But when you're operating a massive excavator (with leverage), one wrong move could demolish the entire house.

The more powerful the excavator (leverage), the steadier your hand on the controls (judgment) must be.

To summarize

So, Naval is essentially reminding us of a sequence for success:

First, work hard to find and build your leverage. In this era, the best choices are code or media, as they are almost free and have limitless potential. Only with leverage do you have the possibility of "taking off."
But more importantly, relentlessly hone your judgment. Improve your decision-making through reading, thinking, and practice. Because once you have this "multiplier" (leverage), every decision you make is amplified disproportionately. Your judgment will directly determine whether you soar towards the stars or plummet into the abyss.

Ultimately, leverage determines the possibility of how high you can ultimately go, while judgment determines whether you advance or crash on that path.