The Universe is Wonky – The 80/20 Principle by Richard Koch

Richard Koch’s The 80/20 Principle is about much more than just the 80/20 principle.

The first part of the book applies the 80/20 principle to business. 20% of a business’ activities brings in 80% of its profits. 20% of the customers are responsible for 80% of the profits. The trick is to find which 20% this is. Koch provides the guidelines.

The 80/20 Principle

The second part of the book is where the fun is. Here Koch applies the 80/20 principle to your personal life. He approaches this from various angles. Koch describes self-help topics in an excellent concise manner. He limits himself to the bare description of advice. Where many self-help authors often stretch single topics to a full book, Koch keeps it short and to the point. Very elegantly and entertainingly.

Our lives can be improved applying the 80/20 principle. We can be happier and more effective.

The majority of input in our lives have little impact on our outputs, or a small minority of inputs have a dominant effect on our output.

Seek excellence in a few things, rather than being average in many things. Delegate everything that you are not good at or do not want to do. Target a limited set of goals.

Simple is beautiful.

In decision making:

  • Not many decisions are important.
  • Many important decisions are made by default (nothing else is possible realistically).
  • Gather 80% of data in 20% of the time.
  • Make a 100% decision.
  • Change you mind early.
  • If it works, double the bets.

80/20 thinking: think skewness, expect the unexpected, everything. Look for the invisible 20%, focus on the 20% activities, ignore the 80% activities.

80/20 is unconventional, hedonistic, non-linear.

Combine extreme ambition with a relaxed manner.

20% of your activities give you 80% of your happiness. Seek these activities, expand them.

Take objectives seriously.

20% of activities lead to 80% of achievements. Focus on these (a la The 4-hour Work Week by Tim Ferriss).

Hard work leads to low returns.

Do the things you like doing.

Be extreme.

How far could you deviate from the norm without being thrown out of your world?

Prioritize things that can advance your life, things you have always wanted to do, invest in innovative things that can slash wasted time, things that can’t be done, according to others.

Be radical. Screw time leaking activities.

Do things you are much better at than others – and that you like.

Friends: 20% of friends give 80% of joy.

Specialize in a very small niche, one you enjoy.

Manage money 80/20. But stock when people are pessimistic, sell where there is general optimism.

Trust your subconscious. Set goals, let these sink in your subconscious and your subconscious will be put to work to achieve these goals.

Networks and platforms are 80/20 or 90/10 forces.

Work in networks, work in small size, high growth teams.

Find the 80/20 idea.

Unreasonable Success and How To Achieve It – Richard Koch

I think it was Tim Ferriss’ podcast episode with Richard Koch that put me on Richard Koch’s trail. First I read The 80/20 Principle, then bought Unreasonabe Success.

In the book, Koch describes the wisdom he has extracted from the lives of amazing people such as Nelson Mandela, Bob Dylan, Winston Churchill, Jeff Bezos, Albert Einstein, Victor Frankl, Leonardo Da Vinci, and others. Including, of course, Bill Bain and Bruce Henderson. Who. Bill Bain and Bruce Henderson, former Koch bosses at Bain and company and BCG, respectively. Of course, it is totally out of place in this list, but let’s just say this is Koch’s tribute to his former work

From the lives of the greats, Koch has identified 9 milestones on the road to success. These landmarks form the backbone of this book. Koch describes the landmarks and illustrates them in a highly entertaining way with stories about the greats of this world.

These are the landmarks that Koch identifies.

Self-belief. The courage to get started. Related to self-doubt. Self-doubt strengthens self-confidence.

Olympic expectations. Think big, think huge. Set expectations much higher than normal. Visualize that you are a great achiever, making success much more likely.

Transforming experiences. Learn unusual things from unusual experiences. The conventional path will not lead to unreasonable success. Special experiences do. Develop these experiences.

Breakthrough achievements are mostly innovative, sometimes strategic achievements. Combine extreme determination with extreme flexibility. Be innovative and laughably ambitious, and your ideas come from the soul.

Make your own trail, create your own segment, Invent a new field, narrow that field, and develop a unique philosophy.
Find and drive your personal vehicle. Jump on a major current and stand out. Or create your own vehicle. We would call this a platform these days, I guess.

Thrive on setbacks. Be anti-fragile. Find risks and actions. No actions, no learning, no improvement. Reframe disasters and setbacks.

Acquire unique intuition. Intuition is unique when it is important, original, unproven, imaginative, and based on deep knowledge. Where is your opinion that most others disagree with? (forgot who said that – was it Peter Thiel?)

Distort reality. Apply extreme optimism and determination. Inspire others.